What is the typical arrangement between the condo hotel buyer and the hotel management company?
Some of the items described in the agreement include: • The amount of revenue the condo hotel owner will receive. • The amount of revenue the hotel management company will receive. • Typical deductions before each of the parties receives their share. This would include money for a furniture fixture and equipment reserve. • Who will pay for real estate taxes, insurance, capital improvements and debt service. It will usually be the individual condo hotel owner. • Who will pay for operating expenses such as housekeeping, front office, administrative and general, and marketing. These are usually paid by the operator. Frequently, travel agents and credit card commissions are also split between the condo hotel owner and the operator. • There may be a usage agreement which will outline the frequency and notice requirements when owners want to use their condo hotel units.
